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Tuesday, March 29, 2011

Would stricter venue rules improve patent law? In Patentography (NYU L. Rev. 2010), Professor Jeanne Fromer (Fordham Law) argues that considering the "geography of patent disputes" by "making patent venue proper only in the district in which the principal place of business of any of a case's defendants is located" would help resolve complaints of (1) forum shopping, (2) poor district court performance in patent litigation, and (3) insufficient deference by the Federal Circuit. Her basic insight is that this venue restriction "will lead to a concentration of an industry's patent suits in the districts where that industry's firms are densest," so that most pharma suits will be in D.N.J., while software suits will be in N.D. Cal., D. Mass., and W.D. Wash.—and she argues that this industry-specific specialization by generalist courts would produce more reasoned opinions than specialized patent trial courts. I'm not sure that "patentography" is the clearest name for patent geography ("-graphy" refers to a writing or field, and patent attorney Mark Rosen made aborted efforts to define "patentography" along these lines), but Fromer presents an intriguing argument that taught me something new and made me rethink my views on specialized patent courts.

Sunday, March 27, 2011

Michael Risch (Villanova Law) has posted two new articles on SSRN that are related to recent Written Description posts. The first is Patent Troll Myths (forthcoming in the Seton Hall Law Review), which compares results with Patent Quality and Settlement Among Repeat Patent Litigants by John Allison, Mark Lemley, and Joshua Walker. Risch begins with a provocative claim: "It turns out that just about everything we thought about patent trolls—good or bad—is wrong." Risch started with the ten "most litigious" non-practicing entities (NPEs)—including Acacia Technologies, General Patent Corp., and Ronald A. Katz—and searched for all cases involving these NPEs from 1986 and 2009, resulting in a dataset involving 1011 cases and 400 patents.

Wednesday, March 23, 2011

I recently uploaded a revised draft of my current working paper, Do Patents Disclose Useful Information?, on SSRN. I am grateful for all the feedback I have received on this paper so far, and I welcome more—please feel free to email me. Here is the abstract:

Courts often state that patents are justified by disclosure theory, the idea that patents are awarded as quid pro quo for the public disclosure of inventions. Economists have long argued that disclosure theory should be accorded no weight in the design of the patent system because patented inventions would have been disclosed anyway. Even the few legal scholars who dispute these economic arguments agree that, in practice, patents are currently not useful as technical sources for other innovators. This Article challenges all these arguments, arguing not that disclosure theory is a valid justification for the patent system, but rather that the benefits of full technical disclosures are stronger than is generally believed, and that these benefits probably outweigh any incremental loss in innovation incentives. Using results from a new survey of nanotechnology researchers and case studies of individual patents, this Article shows that patents do contain useful technical information that is not available elsewhere. This technical content could be improved, however, in at least three ways: stronger enforcement of disclosure requirements (including through an obligation to respond to good faith reproducibility questions from skilled researchers), elimination of legal barriers to using patents as technical sources, and improved access to patents through peer production. These changes will help defuse the tension between patents and the open culture of science.

Monday, March 21, 2011

Are patents legal documents or part of the technical literature? Both, but the balance is currently skewed, says Professor Timothy Holbrook (Emory Law), in Patents, Presumptions, and Public Notice (forthcoming in the Indiana Law Journal): because of patents' "Janus-like nature, reading and interpreting them can be challenging, as courts must parse both the legal and the technical." This article builds nicely on Holbrook's prior work, including Possession in Patent Law (arguing that the purpose of patents is not disclosure, but rather to show that the inventor possessed the invention).

The study was based on the Stanford IP Litigation Clearinghouse, which links all patent suits since 2000 with their corresponding patents (and is "free to academicians, public interest researchers, judges, policymakers, and the media" and run by Lex Machina). The authors compare the 106 patents that were litigated 8 or more times with 343 patents that were litigated only once. Among their findings:

Sunday, March 13, 2011

"[W]hy did business patents arise, and why did they survive?" John Duffy (GW Law) seeks to answer these questions in Why Business Method Patents?, the fifth paper in my review of Stanford's Bilski Symposium. Unlike thefirstfourpapers, Duffy neither explains how Bilski should have been decided nor focuses on how Bilski will be interpreted going forward; rather, he presents a compelling (and well-written) historical explanation of how we ended up where we are today.

The inaugural Samsung-Stanford Symposium on Patent Remedies took place on February 18, 2011, at Stanford Law School. The panels featured both law professors and students who won the Samsung-Stanford prizes on the basis of their proposals. Links to videos of the panels and PDFs of the papers are included below.

Part I is about neither patents nor Bilski: Feldman argues that Moore v. Regents of the University of California (holding that a patient who consented to removal of his cells did not have a property interest in those cells) was wrongly decided, and that a person should have a property right in cells that are removed from his or her body. (If I were editing this piece, I might recommend that this Part be cut or reduced to a paragraph in the Introduction: this argument isn't new, and I think it detracts from the more interesting arguments in Part II.)

Part II examines "the extent to which inventors can tie up human genes and related substances" in light of Bilski and Association for Molecular Pathology. Like Dreyfuss and Evans, Feldman focuses on the use of "pre-empt" in Bilski, arguing that "[i]n gene-related inventions, pre-emption problems can emerge ... in the context of attempts to tie up a natural phenomenon." Under this preemption test, inventors should not be allowed to patent "the relationship between elevated blood sugar levels and diabetes" but should be able to patent "personalized medicine diagnostic methods, which may involve hundreds of biomarkers and complex statistical modeling." Considering the breast cancer genes at issue in Molecular Pathology, Feldman argues that the diagnostic claims are closer to personalized medicine, while the therapeutic claims (for "the 'method' of determining whether a cancer therapeutic is effective") have "greater problems."

"The more interesting question," writes Feldman, "involves the claims to particular DNA and cDNA sequences created outside the human body." She argues that the common analogy between gene patents and isolated and purified natural products (like the paper pulp in the 1874 American Wood-Paper case) is outdated because "the modern creation of genetic inventions no longer requires purification"; instead, genes can be built "from the ground up" through chemical synthesis. Feldman argues that genes should be patentable if researchers can develop specific uses for them, and that "the fact that genes exist in a natural form in the human body should not prevent patenting of genes in laboratory form." The subject matter test is related to novelty and utility: "we ask whether the invention allows us to accomplish something that we could not accomplish with the natural product. Applying that yardstick to isolated DNA and cDNA would suggest that such products should be considered human invention, rather than the handiwork of nature."

Feldman says that the problem is not gene patents per se; rather, it is "allowing patent holders to reach beyond the state of knowledge at the time of the invention," and "[t]he solution lies in properly limiting the scope of the allowed claim." But unlike Lemley et al., who argue that § 101 independently limits claim scope, Feldman says that "this limitation could be accomplished through the disclosure requirements of section 112." Myriad's BRCA1 patent claims, for example, should be limited to the BRCA1 sequence "for the purposes of breast cancer diagnosis in a designated patient population." (Feldman doesn't explain what "a designated patient population" would be, but presumably it would be something like "women at risk for breast cancer.") These restrictions might be important in some hypotheticals, but they wouldn't satisfy the Molecular Pathology plaintiffs, since the use of the BRCA1 gene for breast cancer diagnosis is what they care about. But presumably Feldman would argue that under our current patent laws, that makes doctrinal sense.

Like Lemley et al. and Menell, Dreyfuss and Evans agree that the fractured Bilski opinions were uninformative. (Does anyone think the Bilski opinions were great? That would be a novel argument.) They write that "preempt" is used "entirely within the legal domain" and has no meaning in "technological discourse." (It addition to describing displacement of state law by federal law, the term frequently came up in law review article discussions: a "preempted" piece failed the novelty prong for a good law review article.) In Part I, Dreyfuss and Evans argue that § 101 does not tell us "whether" a new technology can be patented, but rather "how" the technology is claimed: "claims that 'preempt' competitive development—that cover prospects that cannot be efficiently mined by individual rights holders—are barred." This is very similar to the argument by Lemley et al. that § 101 is about claim scope, not gatekeeping.

In Part II, Dreyfuss and Evans apply these ideas to patents on genetic diagnostics, which is a subset of what are often called "gene patents," and I will use the "gene patent" shorthand in this post. Lawyers who are unfamiliar with genetic diagnostics will enjoy II.A on "The Science of Genetics." II.B then reviews the SACGHS report on genetic diagnostic patents (Evans was chair of the SACGHS task force). The piece reports that "when there were patents held exclusively by a single entity, both clinical practice and scientific development were impaired," which is a different message from the SACGHS draft report, which concluded that "patents covering genetic tests ... do not appear to be causing wide or lasting barriers to patient or clinical access," as I quoted in Access to Bio-Knowledge: From Gene Patents to Biomedical Materials. But because the draft report found that patents do little to help the development of new genetic diagnostics, I argued in Access to Bio-Knowledge that the report still supported calls for exempting genetic diagnostics from patentability—a conclusion that the final report makes even stronger.

Dreyfuss and Evans hint in Part III that a legislative carve-out may be unnecessary because patents on genetic diagnostics might "preempt" competitive development for at least four reasons: (1) inventing around gene patents is impossible, (2) gene patents limit interoperability, (3) gene patents create broad unmined prospects, and (4) patentees for genetic diagnostics tend to be academics who are not primarily motivated by patents. (This last factor seems like an important policy concern, but the link to preemption is less obvious than for the other three.) The authors never actually say that they think genetic diagnostic patents are not patentable subject matter under Bilski, but they note that "it is no wonder that courts have begun to question the validity of these patents" (citing Association for Molecular Pathology) and that "one Federal Circuit judge has already suggested that Bilski's preemption test raises serious questions about patents on isolated DNA molecules" (citing Judge Dyk's opinion in Intervet v. Merial).

I wish that the paper had a more explicit conclusion—even if the authors do not feel comfortable claiming that genetic diagnostic patents do preempt development and are thus unpatentable subject matter, they could at least lay out what factors still need to be examined to decide whether this is true—but I still think the paper does a nice job of highlighting the preemption concern and thinking about factors that might be relevant in investigating preemption.

In his Stanford symposium piece, Menell argues that Bilski was a missed opportunity to delineate the confusing boundaries of patentable subject matter. This by itself isn't news: as soon as Bilski came down, the patent blogosphere said it was a vagueletdown that offers no clarity. And the opinion fit nicely with Peter Lee's thesis about Supreme Court patent cases raising cognitive burdens for judges. But Menell does not simply critique the Court's fractured majority as vague; he also criticizes its methodology: "In its effort to shoehorn analysis of patentable subject matter into a textualist mold, the Court collapsed the rich historical development of patentable subject matter into three amorphous, static, and ill-defined exceptions [for laws of nature, physical phenomena, and abstract ideas]. The resulting methodology and analysis are incoherent." Although Menell argues against the Supreme Court's "textualist turn," he is still able to wield the tools of textualism more deftly than the Court when criticizing the majority opinion in Part II.

Rather than using textualism, Part IV argues that the Court should "integrate the constitutional and jurisprudential traditions surrounding patentable subject matter with statutory construction principles and forthright recognition of the challenges of applying historic doctrines to unforeseeable technological developments." Specifically, courts should (1) "ascertain whether any constitutional provision constrains legislative or judicial power" and then (2) "determine the appropriate interpretive lens" based on whether the statutory text in question was intended to change prior law—if not, courts should continue the common-law patent tradition.

Applying this framework to Bilski, Menell argues that "[t]he historical record strongly indicates that 'useful Arts' was understood at the time of the Constitutional Convention to limit patents to technological fields," and that "[t]here is no reason to believe that 'business methods' have become a science or technology," so "the Court did not need to reach the statutory question." But if it did consider the statute, the Court should have noted that the 1952 Patent Act "perpetuated" a "functional, common law approach" for patentable subject matter, using "process" not in its 1952 dictionary sense but "based upon the rich jurisprudence of the prior 150 years," which "limited 'process' or 'art' to physical acts that produce a physical or chemical transformation or operate a machine."

*Nitpicky Bluebook tip of the day: The Bluebook is full of unnecessarily complicated rules (see my classmate James Kwak's critique), but once you have been an articles editor, little mistakes jump out at you. One of the most common mistakes that slips past editors is the capitalization of the word "to," which should be lowercase when used as a preposition (rule 8(a)), but uppercase when used as part of an infinitive verb (as in two of the examples in rule 16.3). So in the title of this article, we have "to the Promised Land" and "to Its Technology Mooring" but "To Ground." (Also note that "Its" should be capitalized, even though it is under five letters, because it is not an article, conjunction, or preposition.) Will "mistakes" like this keep your brilliant article from getting accepted? Of course not. But will lots of Bluebook mistakes signal that you might have been sloppy with more important details? Maybe. (Whether editors should be so worried about the capitalization of "to" is another question...)